Credit Worthiness of Women Entreprenurship

8/3/2019 Credit Worthiness of Women Entreprenurship

1/21Electronic copy available at: http://ssrn.com/abstract=1424275

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Credit Wor thiness of Women Ent r epr eneur s

in Banglad esh

[This Assignmen t is a Par tial Fulfillm en t of the Orienta tion Cour se]

Sub mitted By:Md. Masud ur Rah man

Progr am Officer

Women Entrep ren eur s Developme nt Section

Subm itted To:

The Man aging Director

Small & Medium En terpr ise Found ation Royal Tower , 4 Pant ha pat h, Dha ka-121 5.


2/21Electronic copy available at: http://ssrn.com/abstract=1424275

|Credit Worthiness of Women Entrepreneurs in Bangladesh|

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| Cont ent s: 1. Abstract 032. Introduction 033. Women Employment Status in Bangladesh 054. Policies and Programs Encouraging Women Entrepreneurship 065. The UN Convention- Beijing Declaration 076. Government Credit Policy for Women Entrepreneurs 087. Requirements and Women Capacity to Receive Credit 118. Supporting Services by the Organizations to Make the

Women Entrepreneurs Credit Worthy12

9. Problems faced by the Bankers to Provide Credit to WomenEntrepreneurs

18

10.Remedies to Overcome the Problems 1911.Opportunities to Provide Credit to Women Entrepreneurs 2012.Conclusion 21


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[Abstract: Bangladesh is a densely populated country which is also belongs

to the least developed countries. About half of the populations of this

country are female. There was a time while these large numbers of women

were engaged only with homemaking or reproduction and rearing of

children. Women in significant number are now seeking employment

outside the bounds of their homes in nearly all fields. Some of the womenare coming to entrepreneurship. From the very beginning they have been

facing different problems to access to institutional credit facilities. This is

because of the lack of capacity of the women entrepreneurs in the one hand

and lack of confidence to the women entrepreneurs by the financial

institutions on the other hand. Different wings of the government,

Bangladesh Bank, SME Foundation, Financial Institutions, NGOs, trade

bodies and public-private partners are striving to eliminate these problems.

Now a days credit worthiness of the women entrepreneurs are increasing as

a result of the government initiatives, role of SME Foundation, activities of

the different trade bodies, products/services offering by the Financial

Institutions especially by the commercial banks, and more importantly

change in the mind set of society in favor of the actual and potential women

entrepreneurs.]

1. IntroductionFEMALES are roughly half the population of Bangladesh. The numerical strength of the

female population should point towards the indispensability of utilizing their full

potentials for economic growth and development. Keeping such a vast number in thepopulation limited to the role of homemakers or reproduction and rearing of children

only, means keeping half of the population away from gainful economic activities. All

nations in the modern times that have climbed up the economic ladder made full use of

the productive capacities of their entire working population regardless of gender.

Optimum production of goods and services on which depend economic prosperity and

well-being of the people as a whole, cannot be achieved where a very great number in

the population are confined to non-paying traditional chores in the households. But

cultural and religious factors have tended to force such unwelcome restraints on the

females in Bangladesh. It is a heartening sign, though, that such an ossified outlook

about women's role is starting to change.

Almost all the concerns of Bangladesh have befittingly underscored the need for

extending all possible supports by the commercial banks and financial institutions in

order to promote women entrepreneurship, particularly in small and medium

enterprises. They recognized the need for different programs which includes lowering

the existing rate of interest on credits, setting up SME unit or desk in commercial banks,

simplifying loan disbursement system and creating SME-friendly tax, duty and VAT


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structure. The concerned authorities do need to implement such measures in earnest

sooner than later to help strengthen efforts for women's empowerment which is also an

important objective of national poverty strategy.

Women in significant number are now seeking employment outside the bounds of their

homes in nearly all fields. A notable rise in this increasing participation of women ineconomic activities is the rate of their successes in different fields of enterprise. Non

government organizations (NGOs) have been particularly successful in rousing and

helping rural women to come forward to set up dairies, poultries, vegetable farming,

small scale trading and other non-farm enterprises. The NGOs have replicated their

rural experience also in the urban areas and helped the establishment of enterprises

run with female manpower. These developments have been contributing notably to the

net of output in terms of goods and services in different areas while enabling the

women entrepreneurs and workers to become more and more resourceful and climb

out of the trap of poverty. Now a more pro-active role by the commercial banks,

financial institutions and National Board of Revenue will certainly go a long waytowards fulfilling one prime objective of national poverty strategy.

The greatest benefit of women's empowerment through their direct participation in

income-generating and wealth-creating activities can certainly come from helping out

females in the rural areas where they are located in the greatest number. Various

supportive policies of the government, in tandem with the efforts of the banks and

financial institutions, should, therefore, be coordinated to facilitate the economic

empowerment, particularly of rural women in the highest number. The city based

women entrepreneurs should also be the beneficiary of such policies and measures.

Some businesses run by women in Dhaka and the other cities by women of upper andmiddle class origin, are doing exceptionally well. This shows the great possibilities of

the country's educated female entrepreneurs coming from the higher classes. Given

more supports through fiscal policies and in areas of institutional credit, this group may

achieve wonders in different fields of enterprise creating opportunities for large scale

employment and earnings of workers of their own gender.


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2.Women Emp loyment Statu s in BangladeshWomen in the rural informal sector are either self-employed or employed in family

based enterprises that includes both agricultural and non-agricultural sector. These

activities which include homestead agriculture, livestock and poultry rearing, fishfarming, nursery and tree plantation, tool making, kantha sewing, fish net making,

food processing, tailoring, rice processing etc. have been regular and invisible

sources to family income supplementation. A sector- wise distribution of employed

persons in rural areas shows that agriculture is the pre-dominant source of female

employment, followed by the manufacturing sector.

Table-5: Sex base d Distr ibut ion of Em ploymen t

Occupation

National

occupational

employment (%)

Share of Male

employment at

total employment(%)

Share of Female

employment at total

employment (%)

Technical 3.3% 3.5 3.0

Administrative 0.4% 0.6 00

Clerical 2.2 3.2 0.6

Sales 11.3 16.8 2.2

Services 3.5 2.4 5.4

Agriculture 63.8 54.6 78.8

Production 15.5 18.9 10.0

Total 100 100 100

Source: Statistical Pocketbook, Bangladesh 99, Bangladesh Bureau of Statistics,

Government of the Peoples Republic of Bangladesh, Dhaka 1999 (Page 144).


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3.Policies and Pr ogr ams En cour aging and Sup por tingWomen Entr epr eneur ship

The importance of women entrepreneurs in the national development process has

been acknowledged by successive governments and steps initiated to realize these

objectives. Consequently, under successive Five Year Plans, womens development

initiatives have been gradually integrated into the macro framework and multi-

sectoral economy to bring women into the mainstream of economic development

and encourage potential women entrepreneurs realizing their business plans.

In all Development Plans, i.e. from the First to the Fifth Five Year Plan, development

of women in all spheres of our national life has been given priority. The First Plan

(1973-78), as for example,emphasized a welfare-oriented approach and focused on

rehabilitation of war-affected women and children. The Two Year Plan (19 78-80)

was characterized by a shift from welfare to development efforts. The Second Plan

(1980-85) emphasized creating a congenial atmosphere for womens increased

participation in development through expanding opportunities for skill

development, credit and entrepreneurship development program. The Third Five

Year Plan (1985 -1990 ) had specific objectives to reduce disparity between

development of men and women. The Four th Five Year Plan (1 990 -95) placed

women within the context of macro framework with multi-sectoral thrust and

focused more on the development of poor and disadvantaged women.

In the Fifth Five Year Plan (199 7-2002 ) as many as 24 goals and objectives are set

for development of women and children in the country. These goals and objectives, if

implemented properly will definitely contribute with the participation of women in

every sphere of our national life.


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4.The UN Con ven tion-Beijing Declar at ionThe Fourth World Conference of United Nations on Women Development in Beijing,

1995, adopted the Beijing Declaration: Platform for Action Plan (PFA). The PFA

provided an agreed upon strategy for global community to move forward and

entrust the governments for the development of women in all areas.

In article 11 and 13, the Beijing Declaration distinctly mentions the issue for the

development and emancipation of the women. Article 11 of the PFA provisions for

general development of the women. Article 12 on the other hand mentions the issue

of the equal economic right and opportunities and development of women. It

includes the right of the women for credit, which is a basic pre-condition for the

development of the women entrepreneurs. The two articles are:

Ar ticle 11

State parties take all appropriate measures to eliminate discrimination against

women in the field of employment in order to ensure, on the basis of equality of men

and women, the same right in particular: The right to free choice of profession and

employment, the right to promotion, and security and all benefits and conditions of

service and the right to receive vocational training, including apprenticeships,

advanced vocational training and recurrent training

Ar ticle 13

State parties shall take all appropriate measures to eliminate discrimination against

women in other areas of economic and social life in order to ensure, on a basis of

equality of men and women, the same right, in particular to: The right to bank loans,

mortgages and other forms of financial credit

The government of the Peoples Republic of Bangladesh has adopted the Beijing

Declaration and the Platform for Action. The government commits to implement the

resolution of the Deceleration in its relevant polices. The Ministry of Women and

Children Affairs has set up an inter-ministerial Task Force to follow-up the

implementation of the resolution of the Platform for Action Plan culminating the

National Policy and National Development Plan and for development and

empowerment of women and protection of womens rights.


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5.Gover nm ent Cr ed it Policy for Women Ent r ep r eneu r s5.1.1.Cr edit Policy and Indu str ial Developm entCredit plays a central role in industrial development. So access to credit facilitiesin the modern economic world is a determining factor of the level of economic

activity and growth. The experience of the developed world shows that not only

economic endeavor but also social endeavor like education is ensured by

adequate supply of credits. But there are various formalities and complicated

procedures, which in most cases make credit a relatively inaccessible commodity

to meet the growing need of the entrepreneurs of developing countries like

Bangladesh.

Academicians and people from the practical field also have emphasized the

necessity of credit for the promotion of women entrepreneurs in various ways. According to Dr. Muhammad Yunus of Grameen Bank, credit creates hope and

ambition for change in the women business peoples and potentials

entrepreneurs. Jennifer Riria-Ouko, Managing Director of Kenya Women's

Finance Trust have the view that "Direct financial services are the key way to

empower women and empowering women is the only way to achieve total

development".

Bangladesh has a wide network of NGOs that sponsor schemes targeted towards

lending to women on preferential basis. BSCIC, MIDAS, NASCIB, Women

Entrepreneurs Association, Bangladesh, Jatiyo Mahila Sangstha have beenplaying in this respect a leading role. The DCCI has joined this program with

specific objectives and targets for bringing the women entrepreneurs in the

mainstream economy. And in this a sample survey to assess the status of women

entrepreneurs in Bangladesh has already been completed by the DCCI to plan a

strategy what are needed for women entrepreneurship development.

5.1.2.Cr edit Policy for the Women Entr epr en eur sThere is no credit policy in the country, which could be devoted for women

entrepreneurship development. Certainly it could be questioned: Is specific

credit policy necessary for the promotion of the women entrepreneurs? Is it not

tenable since the government is issuing or has issued policies concerning almost

all the sectors, which have preponderance of private sector involvement

including women entrepreneurs. Is not it sufficient to have a well designed credit

policy of the country within the framework of a more comprehensive financial

policy, which certainly include the necessity of the women entrepreneurs?


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In place of a credit policy, what is available is a set of credit arrangements guided

by Bangladesh Bank (BB). This is arranged by the central bank and executed by

the individual commercial banks, specialized leasing and other types of banks,

which operate in the public and private sectors. Under the financial sector

reform a lot of flexibility has been ensured for running the credit system. Now an

interest band based client relationship is allowed rather than a fixed rate ofinterest as used to be prescribed by Bangladesh Bank earlier. But in absence of

any mandate laid down by the Bangladesh Bank, it is seen that private banks are

more prone to financing export-import sectors than to go into long term lending

for industrial units, because it is more profitable and predictable for the banks.

There is no policy prescription in the Industrial Policy 1999 that suggests that

bank or other financial institutions should have special arrangements for

financing women's enterprises. The Industrial Policy does identify women and

their financial or other needs what is done in India where Industry Policy

incorporates special arrangements for women enterprises. Thus, it is expectedthat overcoming the shortcomings of the Industry Policy 99 in respect of special

financing arrangements for women enterprises like permission for using share

market for capital mobilization may be considered.

In Bangladesh, a special bank named BASIC is established with the mandate to

finance small and cottage industries sector. Since its direct lending program

could not be so successful, so it is now operating through NGOs in this respect.

But, unfortunately, its mandate is not adequately utilised by the lending of NGOs.

The NGOs do not finance small industries or even cottage industries of higher

levels. The statistics from1998 in respect of this function of BASIC show that outof 237 projects directly funded by the bank only two were women

entrepreneurship related. BASIC's involvement in funding women's enterprises

can, therefore, be termed very insignificant, in that respect, the function of BASIC

is not worth mentioning.

5.1.3.Cr edit for Women Entr epr eneu r sMost of the organizations, institutions and agencies, however, sponsor very small

loans. Such loans may be sufficient for keeping the beneficiaries above the

poverty line but not adequate to enter into business at a higher level, which

could be designed as enterprise. These institutions follow, however, the policy

for promotion of self-sustaining employment and income generation for the poor

and vulnerable women especially in rural area. Certainly the programs of these

institutions have useful impact for poverty alleviation and self-employment. And

it must be recognized that these programs are not designed to promote women

entrepreneurship and meet the needs of women entrepreneurs.


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There are a limited number of banks in the public sector and in the private

sector, which are sponsoring lending programs for women catering to their

needs for capital. These loans do not, however, exceed TK 3 lakhs and are mostly

not collateral based and can cater to women entrepreneurs who are operating

above self-employment levels but on a limited scale which is equivalent tocottage/micro-industries level. Those lending schemes are largely project based

and do not constitute an integral part of lending even in case of public and

private sector banks. The institutions, which do not insist on collateral for these

loans do, however, insist on guarantees from husbands or relatives of the

intending women borrowers. Thus male dependency in this sphere of lending

even for a small amount is very prominent and that handicaps women

entrepreneurs to obtain loans.

For small and medium size women entrepreneurs, there is no special credit

program in the country. Credit is most valuable for the development of the smalland medium size women entrepreneurs. Because, from small and medium size

entrepreneurs grow the leading industries. Besides, small and medium size

entrepreneurs play decisive role in the direction of the future development. On

the other hand, medium and long term credit is entirely collateral based, which is

subjected to a multitude of cumbersome and complex formalities. Besides, the

rate of interest is relatively high, which discourages women entrepreneurs to

utilize the lending facility of this kind.


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6.Requ irem en ts and Women s Capacity to Receive Cr ed it6.1. CollateralWomen entrepreneurs lack resources/capital due mostly to unequal inheritance.

For bank loan women need to give collateral except in very few cases of projects

catering to small needs. It is a social problem that the loan given to women needsto be guaranteed by the husband, father of the family though this is not a legal

requirement. On the other hand, families feel more comfortable supporting

financially a son, that a daughter for capital.

6.2. InfrastructureBanks often want to see show rooms or shops before lending though this

requires capital. Most women start with home based activities and cannot afford

the expenses of taking possession of show rooms shops.

6.3.

Trade Licen seTo get a loan or a trade license one has to have as signboard or shop. Form

womens small endeavors like home based tailoring or fast food preparation,

they cannot put up a signboard in a rental premise. The landlord does not allow

that because utility charged become high. Women owned enterprises are mainly

fount at rental premises particularly in urban areas like Dhaka, and hiring the

premises becomes a difficult position for women in smaller towns.

6.4. Tax Ident ification Num berA Tax Identification Number (TIN) is required for getting a trade license and

bank loan. To get a TIN for a trade license one has to submit tax return even

before and income earned.

6.5. Man ager ial Know-howWhile the efforts from the difference bodies working for the women

entrepreneurship development trying to remove the obstacles for getting loans

from the commercial banks, the lack of entrepreneurial, managerial and

technical skills also inhibits their capacity to grow and enhance their

competitiveness.

6.6. Sus ta inab ility of Busin es sWomen work in a limited number of sectors such as handicrafts, dress-making etc.and this makes competition extremely high. The dress-makers generally have a

seasonal business and they have to compete with imported goods and shops in local

markets. Many women do not have their won shops and have to supply to other

markets on credit which bocks their capital and providers low retunes. This type in

sustainability discourages the bankers to provide loans to the women

entrepreneurs.


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7.Supporting Services by the Organizations to makethe Women Entr epr eneu r s Cr edit Wor thyThere are so many government wings, chambers, trade associations, and

independents bodies are working in the country for developing the women

entrepreneurs. Some of them are working the capacity building, some of them areworking as the bargaining agents, some of them are providing credit facilities and

some of them are providing diversified for services to the actual and potential

women entrepreneurs. Some of the major organizations those who are working for

developing women entrepreneurs in the country are discussed hereafter.

7.1. Ser vices of Finan cial and Credit Institut ionsGenerally, financial institutions and banks extend credit for women under micro-

credit program for poverty reduction. Based on the cost of the fund, the interest

rates of these credits vary. For this purpose, mainly donor supported project

funds are used, though some funds are also provided by Bangladesh Bank. The

Bangladesh Bank directs the commercial banks to lend at least 1% of their

lending capital for industrial sector. 5% is expected to be spent for SCI sector.

These loans are often operated through NGOs or development agencies. Men

mainly access the investment in the industrial sector. However, other than for

poverty reduction project loan, there is no special regulation for credit for

women entrepreneurs.

Since the banks do not preserve gender based financial data, it is not possible to

provide information in this regard. Some banks have ladies branches. But the

objective of the activities is to mobilize savings and not encourage investments.

Besides, the number of ladies branches are very limited in compared to the

needs (Table - 7). Most of these branches, however, incur loss, because they

function as deposit collectors rather than lending institutions. Though not legally

consistent, the banks and some support programs openly insist on the consent

and guarantee of husbands' or other male relatives' sanctioning loan to women.

The number of women borrowers from banks is limited and is extremely lower

than that of men.

Table 7: Ban k-wise Numb er of Ladies Bran ches

Sl. No. Name of Banks Countries Total Branches of Banks

1. Sonali Bank 22

2. Janata Ban 5

3. Agrani Bank -

4. Rupali Bank Ltd. 9

5. Uttara Bank Ltd. I

6. Pubali Bank Ltd. -

7. Total 37


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Source: Accessibility of Women in bonding services, Bank Panorama, Vol. X,YI,

Nos. I & 2 A, March & June, 1996 (Page 122)

Table 8: Ban k Finan cing to Wome n Bor ro wer s by Yea r

Same of thebank

No of Loan ee s Amount Disbursed

1993 1994 1993 1994

Total* Female** Total* Female** Total* Female** Total* Female**

SB*** 292 - 1,925 1 12,353 - 27,521 -

JB 347,312 4 416,773 6 480,765 57 840,519 217

AB 410,741 23 451,123 46 262,368 1,117 305,536 386

BSB 634 1 629 1 6,620 7 3,060 -

ABBL 1,625 8 1,725 8 75,214 333 72,664 152

NBL 6,376 1 6,751 2 80,100 1 87,700 300

Sources: Shoaib Ahmed, Role of Women Entrepreneurs in the Economy, JOBS,

FBCCI

Note:* Total includes all types of loanees, loans and advances

** Female includes only industrial and trading loans advanced to women

*** Sonali Bank Figures only include industrial sector

SB= Sonali Bank, JB= Janata Bank, AB= Agrani Bank, BSB= Bangladesh Shilpa

Bank

ABBL= Arab Bangladesh Bank Ltd., NBL= National Bank Ltd.

7.2. Supporting Services of Public and private Institutions andAgencies

It was planned to provide approximately Tk.25.00 lakh (US$ 76,095) among the

target beneficiaries of the project as credit support to undertake various incomes

generating activities and establish different production units. A total amount of

Tk. 34.82 lakh (US$ 105,984) was disbursed among 2725 target women.

In accord of the Project, BSCIC provided following Skill Up-gradation Training:

Table-9: Skill Up-grada tion Train ing

S.N. Activities Number ofCourse Number ofParticipants Duration of theCourse Months

1 Tailoring 8 90 3-6 Months

2 Bamboo/Cane Works 2 32 3-4 Months

3 Weaving 1 15 8 Months

4 Bag Sheet/Muffler Making 3 52 2-3 Months

5 Bee Keeping 1 20 2 Months


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Source: Terminal Report on Self-Employment For Rural Destitute Women in

Bangladesh Through Cottage Industries Project, Phase II, Mrs. Farida E. Arif,

Dkaka 1991 (page 14).

During implementation of the project, linkages were established with the local

government institutions and other government departments.

The BSCIC supports enable some of its beneficiaries to emerge as small

entrepreneurs. But the women beneficiaries seem to be completely neglected by

the BSCIC in its respective activities. The women who were able to emerge as

entrepreneurs due to supports of the BSCIC, make only 3.8% of the total

beneficiaries of the kind (Table 10). And only 2.0% women beneficiaries of

BSCIC manage their business self.

The Table 11 shows that most of the women entrepreneurs supported by the

BSCIC to grow are involved in "Food and Allied" and "Textile" sectors. Only 4

women entrepreneurs are involved in Engineering and 1 in "Chemical and

Pharmaceuticals" sector. In other sectors, no women entrepreneur is present.

This shows that even the biggest and most important public agency in this

respect remained till 2000 in supporting the women entrepreneurs unsuccessful.

Table 10: Industries Owned and Managed by Women Entrepreneurs in

Eight Indu str ial Esta tes o f BSCIC

Sl.

No.

Name of Industrial

Estate

No. of Enterprises Ownership Management

Operating

(No)

Under

Construction

(No)

Non

Operating/Sick

Total

(No)

Men

(No)

Women

(No)

Men and

Women

Total

(No)

Men

(No)

Women

(No)

Men and

Women

Total

(No)

1.Tongi

(%)

137

(84.1)

9

(5.5)

17

(10.4)

163

(100.0)

146

(89.6)

5

(3.1)

12

(7.4)

163

(100.0)

161

(98.8)

2

(0.2)-

163

(100.0)

2.Natore

(%)

8

(40.0)

12

(60.0)-

20

(100.0)

19

(95.0)

1

(5.0)-

20

(100.0)

19

(95.0)

1

(5.0)-

20

(100.0)

3.Bagerhat

(%)

7

(87.5)

1

(12.5)-

8

(100.0)

6

(75.0)

1

(12.5)

1

(12.5)

8

(100.0)

6

(75.0)

1

(12.5)

1

(12.5)

8

(100.0)

4.Satkhira

(%)

3

(50.0)

2

(33.3)

1

(16.7)

6

(100.0)

6

(100.0)- -

6

(100.0)

6

(100.0)- -

6

(100.0)

5.Dinajpur

(%)

47

(87.0)

1

(1.9)

6

(11.1)

54

(100.0)

51

(94.4)

3

(5.6)-

54

(100.0)

51

(94.4)

3

(5.6)-

54

(100.0)

6.Bogra

(%)

54

(65.8)18(22.0)

10

(12.2)

82

(100.0)

77

(93.9)

5

(6.1)-

82

(100.0)

82

(100.0)- -

82

(100.0)

7.Thakurgaon

(%)

8

(66.7)

1

(8.3)

3

(25.0)

12

(100.0)

12

(100.0)- -

12

(100.0)

12

(100.0)- -

12

(100.0)

8.Jamalpur

(%)

24

(48.0)

20

(40.0)

6

(12.0)

50

(100.0)

48

(96.0)-

2

(4.0)

50

(100.0)

50

(100.0)- -

50

(100.0)

Total

(%)288 64 43 395

365

(92.4)

15

(3.8)

15

(3.8)

195

(100.0)

387

(98.0)

7

(2.0)

1

(0.02)

395

(100.0)

Source: Assessment of the Implications of Policies and Measures for women

Entrepreneurship Development in Bangladesh, CIDA, Dhaka 2001(page 26).


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No. refers to number of industries owned managed absolutely by men orabsolutely by women or jointly owned managed by men and women.

Figures in parenthesis indicate percentages.

7.3. Sma ll & Mediu m Ente rpr ise Foun dat ionThe Government has been the pivotal input into the creation and capitalization

of the SME Foundation (SMEF) as an apex institution. SMEF will implement the

SME policy strategies, and in addition, will be tasked with informing, advocating,

facilitating, financing, planning, coordinating roles aimed at SMEs development.

The SMEF is a limited company licensed by the Ministry of Commerce as a non-

profit organization and registered under the Companies Act (Act XXVIII) of 1994.

The SME Foundation plays its role in helping the SME entrepreneurs including

the women entrepreneurs right from the grass root level to the national level byconducting various programs in an aim to develop the SMEs in the country.

The wings of SME Foundations are working for the development of SMEs in

general and Gender wing of the SMEF is working for the women SME

entrepreneurs development in particular. Different programs and projects of

SMEF are playing a vital role to smooth the credit flow to the women

entrepreneurs. Some of the important of such programs/projects are:

Policy revision and present recommendation to the concern bodies infavor of women entrepreneurs.

Capacity building of women entrepreneurs. Awareness raising program for increasing women participation in

business.

Ensure access to finance by the women entrepreneurs: Revise existing policy to increase access to finance Organize workshop/seminar/round table discussion with the

concerns to smooth credit flow to the women entrepreneurs.

Conducting meeting with the policy makers. Provide gender sensitive orientation to the bankers to smooth

credit flow to the women entrepreneurs.

Marketing facilities for the women entrepreneurs. Technological support for women entrepreneurs. Establish linkage with institution and women entrepreneurs. Infrastructural facilities for women entrepreneurs- advocate for

allocating land to women entrepreneurs.

Capacity building program for minority women entrepreneurs.


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7.4. Micro Industry Development Assistance and Services(MIDAS)

MIDAS Financing Ltd., the sister concern of MIDAS, a non-bank financial

institution licensed by Bangladesh Bank from October 1999 under the Financial

Institutions Act. 1993 has taken over the enterprise financing of MIDAS. It is alsoimplementing the Women Entrepreneurship Development (WED) program of

MIDAS, which aims at mainstreaming women entrepreneurs.

Among all other activities MIDAS Financing Limited financing suitable projects of

women entrepreneurs and monitoring these projects. More than 400 micro and

small enterprises owned and run by women entrepreneurs have been financed

by MIDAS till October, 2000.

Major activities of MIDAS are centered in Training, Trade Fair, Financial

Assistance and MIDAS Mini Mart (an opening of women entrepreneurs products)are playing vital role to credit worthiness of women entrepreneurs.

7.5. The Dhak a Cham ber of Comme rce a nd Indus tr yDCCI is a limited company incorporated under the Companies Act 1913. It was

established in the year 1958. It is the largest Chamber of this country at least in

terms of membership strength. DCCI has its training cell. Besides, a training

institute in the name of DCCI Business Institute (DBI) has been initiated.

The Dhaka Chamber of Commerce and Industry (DCCI) acknowledged that in

Bangladesh women live within the constraints of a conservative society where

men are the customary bread earners. Apart from the domestic duties, women

have, however, to shoulder a major part of the economic burden of the society to

share family expenses. The DCCI assumed that most of the constraints deterring

economic Empowerment of the women are lack of access to economic resources,

including credit, absence to support services, better training and skills, limited

access to power and lack of access to larger quantum of resources. So, initiated

two projects one is TIPS and the second the DCCI-CIPE, ERRA Project

supported by the US Chamber of Commerce, Washington, D.C., USA.

The constitution guarantees all citizens equal rights, which is also reflected in

national policies and plan documents. However, in reality, there are some

disparities between men and women, rich and poor and rural dwellers in access

to the development process both as agents and beneficiaries.


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Social perspectives and overall situation has been facing a lot of changes now a

day. Women participation in all sectors has increased over the last two decades.

In response to the demand of different pressure groups and by disruption of the

socio-economic scene resulting from macro processes, women's economic role

has expanded considerably.

7.6. Jat iayo Mohila San gsth a (JMS)To further social, economic, educational and cultural uplift of women, Jatiyo

Mohila Sangstha (The National Women Organization), was established in 1976.

Its objective was to protect the rights of women and children and empowerment

of women. However, it has undertaken various skill development training and

micro-credit operations, which support entrepreneurship development of the

women population of the country. The programs are conducted using

government grant funds. As a part of its activities, Jatiyo Mohila Sangstha has

initiated a project with the assistance of UNDP to assist potential womenentrepreneurs, which covers all the 64 districts under the name

"Entrepreneurship Development of Women". Main objective of the project,

however, remain alleviation of poverty amongst women through training, credit,

information and marketing support.

The project was initiated in July 1998 initially for five years with a target to

support 7000 rural women. The project supports those who are beneficiaries of

micro-credit programmes of the Department of Women Affairs, Jatiyo Mohila

Sangstha, Department of Youth Development and other public agencies. The

project also aims to link the beneficiaries with institutional credit. The credit

limit is Tk 30,000 to Tk 1,50, 000.

Before extending credit, Jatiyo Mohila Sangstha arranges management training

through contracting other mentioned agencies. The project is new and the

effectiveness cannot be judged now but it can be easily understood that the

project cannot provide comprehensive support to the entrepreneurs in the real

sense of the term and the credit amount is not enough to establish a reasonable

size of enterprise. This has also its limitation to manage and operate such a credit

program because of not having its own credit staff at the field level.


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8.Problems Faced b y the Bank ers to p rovide cr edit towomen Entrepr eneurs

Communication gap between the women entrepreneurs and the banks. Lack of loan security Women entrepreneurs are not aware to provide required information to the

banks

Business experience of the women is very poor Loan size demanded by the women entrepreneurs are very small Find out the actual entrepreneurs, i.e., lack of information about the real

entrepreneurs

Lack of confidence in women entrepreneurs. Lack of manpower and logistic support by the banks. Lack of confidence upon women entrepreneurs Fixed interest rate (10%) for Islamic Banking system Lack of family support to the women entrepreneurs Lack of management skill Women entrepreneurs are not well approaching to business Lack of legal documentation In most of the cases women are doing informal type of business Difficult to appraise the proposal Criteria fulfillment of getting refinance from Bangladesh Bank Lack of marketing drive by the women entrepreneurs. Women entrepreneurs have not sufficient experience to prepare loan

proposal

Reluctant to provide papers, i.e., cash out flow statement, cash inflowstatement, etc.

Normally women are not coming to the banks for loan. Women are afraid about banking procedures to get credit facilities. Advertisement for financing to women is not sufficient.


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9.Remed ies to over come pr oblems Attitude should be positive to women entrepreneurs Organize training for SME women entrepreneurs Information needed by the women entrepreneurs for getting loan should be

available by the concern bank, Bangladesh Bank and SME Foundation.

Assist the Women entrepreneurs to prepare loan documents Launching collateral free product for the SME women entrepreneurs Change mind set of the management (top) in Bank Loan disbursement process should be easier Create confidence in women entrepreneurs by providing more finance Women should come forward with more enthusiasm Offer incentives to the bank to finance women entrepreneurs Formulate policies to finance women entrepreneurs Provide counseling and guidance to the women entrepreneurs Relation building with banker's and entrepreneurs FIs should keep their door open for the women entrepreneurs Government should take some actions to make the process of getting loan

easier for women entrepreneurs

Private bank management should emphasis to the corporate socialresponsibilities

Bankers should provide advisory services to women entrepreneurs Bank should go to the potential women entrepreneurs for financing Extending credit facility based on project cash flows. Requirement of audited balance sheet from the party needed 40 lacs taka as

loan should be exempted.

Format should be written in Bengali for SME loan.


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10 . Opportunities to Provide Credit to WomenEntrepreneurs

There are some special schemes for women entrepreneurs in each and everybank.

Women entrepreneurs are creative and committed to their business. It is a big sector with diversified business area.Credit repayment by the

business women is higher than the business man.

More women are coming to business line, so the market size is expanding. Women are hard working. The have better opportunity for business development. Women empowerment movement helps to change of womens thinking to

business.

It is an untapped market. Women entrepreneurs may be big client of a bank in future.


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11 . ConclusionWomen entrepreneurs constitute less than 10% of the total business entrepreneurs

in Bangladesh whereas women in advanced market economies own more than 25%

of all businesses. It is heartening to note that despite many barriers, a new women's

entrepreneur class has arisen in the country taking on the challenge to work in amale-dominated, competitive and complex economic and business environment. Not

only have their entrepreneurship improved their living conditions and earned more

respect in the family and the society, but they are also contributing to business and

export growth, supplies, employment generation, productivity and skills

development of the country. A recent United Nations report concluded that

economic development is closely related to the advancement of women. "In

countries where women have advanced, the economy has usually been steady. By

contrast, in countries where women have been restricted, the economy has been

stagnant."

Women's entrepreneurship is not an easy task. "Becoming an entrepreneur is an

evolution of encountering, assessing, and reacting to a series of experiences,

situations, and events produced by political, economic, social and cultural changes."

Given the complexities in the social environment and administrative structure,

women's entrepreneurship in Bangladesh is more challenging. Many social and

operational constraints continue to restrict women from starting and running

economic enterprises. Apart from the family and social barriers against the mobility

of women, the operational barriers such as lack of access to capital, lack of training

facilities for skills development, lack of business services, lack of business data,

complex banking procedures and collateral requirements, etc. continue to criticallylimit their progress.

Entrepreneurship is the driving force to bring about excellence in production,

market innovation, human resources and skills development, social mobility, and

changes in the attitude of people. Development of women's entrepreneurship offers

excellent opportunities for development of one half of the population and for overall

socio-economic progress of the country. Women's entrepreneurship indeed can

bolster economic autonomy of women, promote gender balance and ultimately can

lead to participation of women in broader decision making processes of the country.

This study can conclude that the credit worthiness of the women entrepreneurs are

increasing as a result of the government initiatives, role of SME Foundation,

activities of the different trade bodies, products/services offering by the Financial

Institutions especially by the commercial banks, and more importantly change in the

mind set of society in favor of the actual and potential women entrepreneurs.

Documents

Credit Worthiness of Women Entreprenurship